U.S. History Collection
Jefferson and Hamilton: Different Visions for a New Nation

Should the United States Have a National Bank?

Economic Policy

On a specific and practical economic level, the new government needed to address several issues, including whether to create a national bank to hold the tax money collected by the government, issue paper currency, pay the government’s debts, and offer banking facilities for commercial transactions.

Thomas Jefferson

“I consider the foundation of the Constitution as laid on this ground: That ‘all powers not delegated to the United States, by the Constitution, nor prohibited by it to the States, are reserved to the States or to the people.’ [XIIth amendment.] To take a single step beyond the boundaries thus specially drawn around the powers of Congress, is to take possession of a boundless field of power, no longer susceptible of any definition.”

—Jefferson’s Opinion on the Constitutionality of a National Bank, 1791

Alexander Hamilton

“A National Bank is an Institution of primary importance to the prosperous administration of the Finances, and would be of the greatest utility in the operations connected with the support of the Public Credit.”

—Hamilton, Report on a National Bank, 1790

Take Notes

Watch this video, in which actors portray Hamilton and Jefferson, and answer the questions that follow.

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Secretary of the Treasury Hamilton submitted a report to Congress in 1790 proposing a Bank of the United States. The bank would be based in Philadelphia and chartered for 20 years. It would hold the tax money collected by the government, issue paper currency, pay the government’s debts, and offer banking facilities for commercial transactions.

Jefferson opposed the bank because it favored the financial interests of the Northeast and increased their influence in government. He also argued that the Constitution did not empower Congress to create a bank and pointed to the 10th Amendment to support his interpretation.

Take Notes

Use the fourth row of the chart below to summarize Jefferson’s and Hamilton’s position on whether there should be a Bank of the United States. Provide at least one reason to explain why each man held the position that he did.

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